Plain English guide to the Localism Bill published

* new freedoms and flexibilities for local government
* new rights and powers for communities and individuals
* reform to make the planning system more democratic and more effective
* reform to ensure that decisions about housing are taken locally

The document Decentralisation and the Localism Bill: an essential guide also gives further background. It explains how the principles that underpin the Localism Bill also inform other government policies.The Localism Bill contains a number of proposals to give local authorities new freedoms and flexibility.

General power of competence
Local authorities’ powers and responsibilities are defined by legislation. In simple terms, they can only do what the law says they can. Sometimes councils are wary of doing something new – even if they think it might be a good idea – because they are not sure whether they are allowed to in law, and are concerned about the possibility of being challenged in the courts.

The Government thinks that we need to turn this assumption upside down. Instead of being able to act only where the law says they can, local authorities should be free to do anything – provided they do not break other laws.

The Localism Bill includes a 'general power of competence'. It will give local authorities the legal capacity to do anything that an individual can do that is not specifically banned by other laws: they will not, for example, be able to impose new taxes, as other laws make clear they cannot.

The new general power will give councils more freedom to work with others in new ways to drive down costs. It will give them increased confidence to do creative, innovative things to meet local people’s needs. Councils have asked for this power because it will help them get on with the job.

Abolition of the Standards Board
Councillors play a crucial role in local life. The people who elect them have the right to expect the highest standards of behaviour. The Government thinks it is important to have safeguards to prevent the abuse of power and misuse of public money. Currently, all local authorities must, by law, have a standards committee to oversee the behaviour of their councillors and receive complaints. A central body, the Standards Board for England, regulates each of these committees.

In practice, however, this system of safeguards is ineffective. It is too easy for people to put forward ill-founded complaints about councillors’ conduct. Lengthy debates about petty complaints or deliberately harmful accusations can undermine people’s faith in local democracy and put them off standing for public office.

In the Localism Bill, the Government will abolish the Standards Board regime. Instead, it will become a criminal offence for councillors to deliberately withhold or misrepresent a personal interest. This means that councils will not be obliged to spend time and money investigating trivial complaints, while councillors involved in corruption and misconduct will face appropriately serious sanctions. This will provide a more effective safeguard against unacceptable behaviour.

Clarifying the rules on predetermination
In parallel with the abolition of the Standards Board, the Government intends to use the Localism Bill to clarify the rules on 'predetermination'. These rules were developed to ensure that councillors came to council discussions – on, for example, planning applications – with an open mind. In practice, however, these rules have been interpreted in such a way as to reduce the quality of local debate and stifle valid discussion. In some cases councillors have been warned off doing such things as campaigning, talking with constituents, or publicly expressing views on local issues, for fear of being accused of bias or facing legal challenge.

The Localism Bill will make it clear that it is proper for councillors to play an active part in local discussions, and that they should not be liable to legal challenge as a result. This will help them better represent their constituents and enrich local democratic debate. People can elect their councillor confident in the knowledge that they will be able to act on the issues they care about and have campaigned on.

Directly elected mayors
Almost every major city in the world has a powerful executive mayor. Evidence suggests that mayors can provide visible local leadership, strengthen economic growth, and boost democratic engagement. There are currently only 12 elected mayors in England. The Government thinks that a new generation of elected mayors with wide-ranging responsibilities and powers could raise the profile of English cities and strengthen local democracy.

The Localism Bill will give more cities the opportunity to decide whether they want a mayor. After the Bill has been passed, the Government intends to make the council leaders in 12 cities 'shadow mayors'. This will give local people an insight into what it is like to be governed by a mayor. Each city will then hold a referendum on local Election Day in May 2012 to decide whether to have an elected mayor for the long term. For areas that vote in favour, mayoral elections will then be held at the same time as local elections in May 2013. People in other areas of the country will be able to use existing laws to call for their own referendum on whether to have an elected mayor.

London
The Localism Bill will pass greater powers over housing and regeneration to local democratically elected representatives in London. It will empower the democratically elected Mayor to carry on housing investment activities currently carried out by the Homes and Communities Agency, and the economic development work done by the London Development Agency.

New rights and powers for communities
Greater freedom and flexibilities for local government are vital for achieving the shift in power the Government wants to see. But, on their own, these measures will not be enough. Government alone does not make great places to live, people do: people who look out for their neighbours, who take pride in their street and get involved – from the retired teacher who volunteers in the village shop once a month, to the social entrepreneur who runs the nursery full time.

Until now, however, many people have found that their good ideas have been overlooked and they have little opportunity to get on and tackle problems in the way they want. Voluntary and community groups often find that their potential contribution is neglected, when, in fact, they carry out some of the most innovative and effective work in public services and we should be encouraging them to get more involved.

We want to pass significant new rights direct to communities and individuals, making it easier for them to get things done and achieve their ambitions for the place where they live.

Community right to challenge
The Government thinks that innovation in public services can offer greater value for taxpayers’ money and better results for local communities. The best councils are constantly on the look out for new and better ways to design and deliver services. Many recognise the potential of social enterprises and community groups to provide high-quality services at good value, and deliver services with and through them.

In some places, however, voluntary and community groups who have bright ideas find that they do not get a proper hearing. The Localism Bill will give these groups the right to express an interest in taking over the running of a local service. The local authority must consider and respond to this challenge. This will make it easier for local groups with good ideas to put them forward and drive improvement in local services.

Community right to bid
Every town, village or neighbourhood is home to buildings or businesses that play a vital role in local life. They might include meeting rooms, swimming pools, village shops, markets or pubs. Local life would not be the same without them, and if they are closed or sold into private use, it can be a real loss to the community.

In many places across the country, when local amenities have been threatened with sale or closure, community groups have taken them over. In some cases, however, community groups who have attempted to take assets over have faced significant challenges. They often need more time to organise a bid and raise money than the private enterprises bidding against them.

Proposals in the Localism Bill will require local authorities to maintain a list of assets of community value. Communities will have the opportunity to nominate for possible inclusion the assets that are most important to them. When listed assets come up for sale or change of ownership, community groups will have time to develop a bid and raise the money to buy the asset when it comes on the open market. This will help local communities keep much-loved sites in public use and part of local life.

Local referendums
In many other countries around the world, communities have the right to put any local issue to a local vote. The ability to trigger a referendum can enliven local democratic debate and give people a way of making their voice heard on the issues that are close to their heart. Currently, in this country, communities can only trigger a local referendum in limited circumstances, and on a very limited range of questions. The Localism Bill will give local people the right to suggest votes on any local issue that they think is important. Local authorities and other public bodies will be required to take the outcome into account as they make their decisions.

Right to veto excessive Council Tax rises
Local authorities derive a significant proportion of their revenue from Council Tax. The money raised through Council Tax is spent on supporting vital local services. But it is also important that Council Tax be set at a reasonable and affordable rate, and that it be managed very carefully to avoid waste.

Currently, central government has the power to 'cap' Council Tax rises. If Ministers think that local authorities are proposing to raise taxes at a rate that goes beyond what is reasonable or affordable, they can stop them doing so. But we think that local people are in a better position than Ministers to say what is fair.

The Localism Bill will give local communities a greater say. The Secretary of State and the House of Commons will agree on a 'ceiling' for Council Tax rises. If a local authority proposes to raise taxes faster than this rate, local people will have the right to approve or to veto the rise in a referendum. This means that local authorities will need to convince local voters of the case for significant rises in local taxes.